IAPC upgrades its auditing pronouncements, issues guidance.
ISA 1, Objective and Scope of the Audit of Financial Statements, and ISA 3, Basic Principles Governing an Audit, were combined into and superseded by Revised ISA 1, Objective and Basic Principles Governing an Audit.
In addition, three standards--ISA 6, Study and Evaluation of the Accounting System and Related Internal Controls in Connection With an Audit; ISA 20, The Effects of an EDP Environment of the Study and Evaluation of the Accounting System and Related Internal Controls; and ISA 29, Inherent and Control Risk Assessments and Their Impact on Substantive Procedures--were combined as Revised ISA 6, Risk Assessment and Internal Control; and Addendum 1 to Revised ISA 6, EDP Characteristics and Considerations.
The IAPC also issued two exposure drafts.
The first ED, Proposed ISA, Knowledge of the Client's Business, sets out what is meant by knowledge of a client's business, why it is important to the auditor and the audit staff working on an engagement and how the auditor obtains and uses that knowledge.
The second ED, Proposed Addendum 2 to Revised ISA 6, Audit Considerations Relating to Service Organizations, provides guidance to a client auditor to satisfy the requirements of ISA 6 when the client uses a service organization.
Comments on both EDs are requested by March 31, 1992.